Your staff are critical to the success of your organization. Business leaders such as Richard Branson and Nick Hewer consider keeping staff happy, and retention high as the mark of a successful business.
“Take care of your employees and they’ll take care of your business”
– Richard Branson, Founder of the Virgin Group
Looking after your staff is essential for reducing staff turnover, a critical factor in the success of your organization. But why is employee retention so impactful?
Recruiting is expensive
Excessive staff turnover can introduce excessive costs related to hiring new staff members. Replacing a staff member can be a lengthy process, and recruitment is costly.
Staff turnover can also introduce extra pressure on the team when there is a shortage of staff, in turn lengthening processes and costing the organization time and money; as well as straining existing staff with bigger workloads.
Research shows that the cost of replacing a staff member is upwards of £30,000 (approximately USD $45,000) on average. This figure includes the cost of logistics, advertising and agency fees, management time spent interviewing candidates and HR time. It also includes wages paid to new employees before they are fully up to speed at the company.
Staff turnover can result in low morale
Excessive staff turnover can lead to an exodus of employees as they see their peers do the same. Those that stay can see their roles become more pressurized, as they take on other people’s workloads and see their roles change or take time out of their usual schedule to train new starters.
The result is that a constant stream of staff turnover can make lives more difficult for those that remain, reducing morale and quality of output as a result.
By focusing your efforts on building employee engagement you can create a positive working atmosphere, give employees a sense of pride in their work and encourage people to stay, avoiding the negative impact of large turnovers of staff.
Develop more skilled employees
A key way you can build employee engagement and reduce staff turnover is to give them regular training opportunities to enhance their own careers. The fact is that a lack of career clarity hinders employee retention. Without knowing how to perform better, employees see their role as a job rather than a career, and will look for ways to achieve their career objectives elsewhere.
The solution is to ensure that employees are clear on their personal development plan and given opportunities to learn and progress. As a result, employees see that their roles are moving them ahead in their careers, are more likely to stay, and because they are more skilled, they help to improve company performance.
Incentive schemes to retain staff
Financial rewards such as bonuses and commission can encourage staff to work towards a goal or target, but aren’t the only way to retain staff.
It’s important to remember that not all of your staff are driven solely by money; there are many other factors that lead to an employee either loving or loathing their jobs.
Psychologist Barry Schwartz says our current thinking about work focuses too much on pay and too little on all the ways we find fulfillment — even in jobs many might consider mundane. Seeing the value in their work is essential for employees, according to Schwartz. Without seeing your work result in a positive outcome, going to work can quickly become demoralizing, leading to reduced employee retention.
An example is Naukri, an online recruitment portal based in India. Company leaders recognized that employees were tempted to leave to work for large US tech companies, however in these organizations, it would generally take longer for employees to get to a senior level with the ability to make things happen. At Naukri, by contrast, anyone in the marketing or technical department with an idea for improving the company website could get this idea implemented immediately and see the impact.
This strategy results in reduced employee turnover and improved job satisfaction, as employees can see the fruition of their work – something that increased remuneration does not provide alone.
Do your corporate benefits meet the needs of your employees?
Companies need to re-evaluate their benefits packages and base these around the needs of those employees who are most likely to leave the company. Invariably these are the young rising stars of the organization in their 20s and 30s, not the senior managers, since younger workers are more likely to consider job changes. Incentivizing should focus on what is important to them – how does your benefits package appeal the needs and aspirations of your employees?
Non-financial rewarding such as earning an extra day of annual leave for long service, flexible working hours, options to take sabbaticals or simply recognition for a job well done can go a long way towards retaining staff.
Telefonica’s recognition scheme is all about being social. They developed a mobile application that works with Yammer, so that colleagues can recognize one another across the Telefonica network. This initiative resulted in more than 4,000 recognition awards being handed out to employees, increased workforce motivation and satisfaction, and improved peer-to-peer relationships.
Take care of your staff and they’ll take care of your organization
As an organization, taking steps to improve your staff turnover rate will positively impact your future success. Costly recruitment processes can be avoided, and you will retain skilled staff that are motivated and share the values and vision of the company.
Research shows that recognition programs dramatically improve employee engagement and reduce turnover, effective employee recognition programs can result in a 31% reduction of voluntary employee turnover compared to companies with ineffective or no recognition schemes.
Look to improve and build employee engagement, and develop your employees’ skills. Strengthening the message that your staff are valued and appreciated within the company using incentives and encouraging collaboration will improve staff retention. Take care of your staff and they’ll take care of your organization!